Opportunity Cost
What you give up when you choose one thing over another: the value of the next best option.
What the essays say
The capitalism essay applies the idea to time: an hour spent earning is an hour not spent on family, rest, or life, and only one side of that trade tends to be counted.
If we can calculate what I could have earned during that hour but have no clear way to account for what that hour was worth to my life, are we really measuring prosperity?
Where people disagree
- In standard economics, opportunity cost is a basic tool: every choice has one, whether or not money changes hands.
- Critics of narrow measurement argue that the costs hardest to price, like time with family, get left out of the ledger.
- Behavioral researchers find people routinely underweight opportunity costs, noticing what they pay more than what they give up.
